Digital wallets are becoming more like bank accounts every day. Paytm, India’s answer to PayPal (NASDAQ: PYPL) is adding insurance to each account.
Wallet Insurance will cover Paytm users for losses due to fraud, theft, or loss of phone of up to 20,000 rupees ($311.87), Initiate India reported. There is no charge for Wallet Insurance as long users have the latest version of Paytm installed on their device.
The idea here is to get more people using Paytm by convincing them that it is insured. The hope is to make digital wallets as trusted as the banking system in the United States. Savings and checking accounts in the USA are insured by the Federal Deposit Insurance (FDIC) or the National Credit Union Insurance Fund (NCUA).
Before the FDIC many people distrusted banks because accounts could disappear overnight. Paytm is hoping that the same strategy will convince Indians to take their money out from under the mattress and put it in its wallets.
Indians can now buy Gold with Digital Wallets
Insurance is not the only new feature on Paytm, users of the digital wallet can now buy gold with it. A new feature on Paytm allows Indians to purchase small amounts of gold that is stored in vaults owned by a company called MMTC-PAMP, FirstPost reported. Paytm customers can buy as little as 16¢ worth of gold.
Since India is the world’s largest market for gold that’s a pretty shrewd move. Indians currently own around 24,000 tons of gold worth $900 billion according to FirstPost. This might good news for owners of gold mining stocks such as Goldcorp (NYSE: GG) which are in decline.
The Biggest Digital Wallet you’ve Never Heard of
Paytm is one of the world’s most popular digital wallets with 200 million customers. It is partially owned by China’s Ant Financial; the owner of the world’s most used digital wallet; Alipay.
Alipay had around 400 million registered users as of February 25, 2017, Expanded Ramblings reported. This puts Paytm in a great position because Ant Financial might be the world’s most valuable unicorn (pre-IPO company), some analysts have estimated Ant’s value at $75 billion. To add icing to the cake, Paytm has also been able to attract $1 billion in financing from Japan’s Softbank, FirstPost reported.
That means Paytm has deep pockets and it is in a great position for growth. Indians are growing increasing distrustful of cash because of Prime Minister Narenda Modi’s decision to declare 86% of their country’s paper currency worthless last year.
Watch Paytm closely because it might soon become a viable competitor to Ant Financial and PayPal.